NEW YORK (Reuters) – The Los Angeles Dodgers filed for bankruptcy protection, blaming Major League Baseball for rejecting a television deal with Fox Network to give the storied baseball team an urgent injection of cash.
Monday's filing marks a dramatic attempt by Dodgers owner Frank McCourt to keep the league and MLB Commissioner Bud Selig from seizing the team, which McCourt has owned since 2004.
In a court filing, the team said it had been "on the verge of running out of cash" but that the Chapter 11 filing will allow it to meet payroll, sign players, pay vendors and continue playing baseball.
McCourt has been struggling to meet payroll and other financial commitments, having been heavily in debt and locked in a bitter divorce battle with his estranged wife Jamie. The bankruptcy could lead to new ownership for the Dodgers.
"The filing preserves the status quo and prevents baseball from invoking its powers to take control," said Jack Williams, a professor at Georgia State University College of Law in Atlanta who specializes in sports law. "Major League Baseball will have a major, if not the predominant, voice in the ultimate ownership structure for the team."
On June 20, the league vetoed the Dodgers' proposed $3 billion, 17-year television contract with News Corp's Fox, saying it would not be in the best interests of the team, the game and fans.
Selig criticized the use of part of a $385 million upfront payment to fund McCourt's divorce. McCourt has said the payment was crucial to the Dodgers' financial health.
"We brought the commissioner a media rights deal that would have solved the cash flow challenge I presented to him a year ago," McCourt said in a statement. "Yet he's turned his back on the Dodgers, treated us differently, and forced us to the point we find ourselves in today."
Patrick Courtney, a spokesman for Major League Baseball, had no immediate comment.
NO WORLD SERIES SINCE 1988
Monday's filing punctuates a stunning fall for one of baseball's marquee teams, whose roots date to 1884 when it played in New York as the Brooklyn Atlantics.
The team became the Dodgers permanently in 1932, and broke Major League Baseball's color barrier when Jackie Robinson began playing in 1947. It moved to Los Angeles in 1958 and has played at Dodger Stadium since 1962.
This year, the team has a 35-44 record and has seen home attendance decline sharply. The Dodgers have won six World Series championships, but none since 1988.
Baseball took over day-to-day control of the Dodgers in April amid worries about team finances, and security concerns that followed a brutal Opening Day beating of San Francisco Giants fan Bryan Stow in the Dodger Stadium parking lot.
Monday's filing comes less than a year after the Texas Rangers baseball team emerged from bankruptcy, owned by a group that includes Hall of Fame pitcher Nolan Ryan.
Other U.S. sports teams to file for court protection in recent years include the Buffalo Sabres and Phoenix Coyotes in the National Hockey League.
A call to the office of Los Angeles Mayor Antonio Villaraigosa was not immediately returned.
MANNY RAMIREZ, ANDRUW JONES ARE CREDITORS
The Dodgers said they have arranged $150 million of financing from lenders led by affiliates of JPMorgan Chase & Co's Highbridge Capital Management LLC so the team can operate normally while in bankruptcy, court records show.
The Chapter 11 filing in the U.S. bankruptcy court in Delaware shows between $500 million and $1 billion of assets and between $100 million and $500 million of liabilities.
Four other entities also filed for protection from creditors, including one that owns Dodger Stadium.
According to Monday's filing, the team's largest unsecured creditors include former Dodger outfielders Manny Ramirez and Andruw Jones, owed $21 million and $11.1 million, respectively.
Ramirez retired this year after learning he had violated baseball's drug policy a second time. Jones plays for the New York Yankees.
Los Angeles Superior Court Judge Scott Gordon scheduled a one-day trial in August to decide whether the Dodgers belong to Frank McCourt, or whether the McCourts should split the team.
The McCourts' lawyers on June 17 said the pair had resolved all issues in their divorce except for the Dodgers' ownership.
"Baseball has every incentive to ensure continuity," Williams said. "It is in the best interests of all the other teams to ensure that the Dodgers remain highly competitive, so the league can put the best product on the field."
The case is In re: Los Angeles Dodgers LLC, U.S. Bankruptcy Court, District of Delaware, No. 11-12010.
(Writing by Jonathan Stempel; Editing by John Wallace)
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